With more than 37,000 students and 8,000 staff members, the University of Birmingham could be likened to that of a small town – having to cater for the varying tastes and choices of a huge number of people in 43 different outlets, throughout the course of the day.
At the time of Nic Mander joining, the university was working with 44 suppliers with a total catering spend extending to £4m per annum. It was processing in excess of 18,000 invoices every year, which involved a team of six people to administer just the function of processing invoices alone.
Confirms Mander, “There is no denying that the University of Birmingham campus has a terrific catering offer. However, when I joined the university, it was quite obvious to me that many of the processes were manual – from the way we ordered food and managed stock to the way we transacted it.
For me, it was paramount to achieve a cleaner financial reporting structure, in a single portal, where all catering procurement could be centralised for improved control and transparency. I initiated a full OJEU tender, defining what we wanted the solution to look like; a fully integrated purchase-to-pay system, including centralised billing, full supplier contract management, stock control with support on nutritional and allergen requirements.”
A number of interested parties responded to the tender and having gone through the process of review, the final solution that was decided on was from Pelican Procurement – a specialist catering procurement company that has been operating in the market for 30 years.”
A phased approach
Mander explains: “A major first step was to review our supply chain and we mapped out a tendering regime for all product categories, which Pelican subsequently handled for us.”
During the go-live period, Pelican arranged for team members to be on the ground to directly support the university’s operational team, and to ensure suppliers were delivering what they should, when they should, meeting compliance and agreed contractual KPIs: “This was particularly helpful,” adds Mander.
The second phase was to roll-out Pelican’s centralised, online Pi system. The team spent time working together to get everything loaded into the system; from agreed products, contractual pricing, to aligning product catalogues with the team, adding all chef’s menus, and link all products to recipes in order for nutritional and allergen information to be automatically applied to each recipe.
Explains Mander, “Many processes were previously on paper – for example, chefs would write a list of what products they needed and it would be handed over for someone to pick-up and arrange. With Pi, we needed to get everyone on board and familiar with the system, particularly as we have a variety of IT skills across the team. A programme was arranged which was led by Pelican, and then supported by ‘power users’ in our own team.”
The tendering process consolidated the number of suppliers from 44 down to 22, creating many efficiencies and savings
Pelican has helped to transform the university’s supply chain function and provided a centralised system that now fully manages every aspect of the university’s catering needs. The supplier tendering process consolidated the number of suppliers from 44 down to 22, creating many efficiencies and savings, however the positive impact it has had overall is extremely tangible as Mander endorses: “A huge advantage for us is that now, with Pi we are able to pay all our suppliers – excluding our Costa Coffee and Starbucks franchise operations which are dealt with separately – via one simple monthly payment. We have essentially reduced the burden of manually processing 18,000 individual invoices a year, down to just 12 to Pelican, and they manage the payments to our supply chain. We have seen a significant reduction in administrative burdens and have been able to redeploy the team of six people into different areas of the business. We have seen a substantial saving in ‘people hours’.”
The university is also able to really get under the skin of the data behind its procurement process as Mander explains: “What Pi gives us is the detail by supplier, so now when we’re at supplier meetings, we have everything to hand on the products we have purchased and any price variants over the contract term – or how close we are to contract price. It makes our invoice control much sharper and we can quickly understand how suppliers are performing on their contracts.”
“It also gives us visibility on product trends; we can quickly see what’s selling well and this insight is great for our chefs. There are 4,500 recipes now on our system and over 12,000 ingredients. Having spent the time at the outset to build recipes in to Pi, it is now able to integrate with our EPOS system, and populate our till system with recipe costs, and as market prices or ingredients change, it automatically updates the till system.”
The advantages don’t stop there, with Mander keen to explain how the online tool is also supporting them with providing clarity on a huge swathe of data. “At any time, I can access reports that assess activity by day of the week, weeks, months, by unit, outlet, by category, brands, products, recipes and more. We can see the products being sold, determine trends and produce accurate costs behind it. As we’re approaching Brexit, it gives us transparent evidence when a supplier adjusts pricing as a result of ‘market conditions’: with Pelican at my side, I’m in a better position to respond to the supplier to question any uplift and have their full support in these discussions.”
As a result of consolidation in suppliers and creation of automated processes and efficiencies, the university is anticipating both financial and resource savings.
“We’re currently showing an improvement in our margins, compared to last year, and I’m confident in being able to get an accurate position this year on our numbers,” confirms Mander. “In fact, the university has been going through the implementation of a brand new accounting system and, so while this project is underway, I can get an accurate position on my numbers at any time through Pi, and so rely on Pelican to keep me on track, while the new accounting system is installed.”
Stock taking has also been transformed as a result of the centralised, digital approach through Pi. “Stock takes was one of the key areas we needed to transform. Previously it would have taken us around a week to complete; now, we get a full report by midday on Monday, following closure on Sunday. To get to the results that fast is a real achievement in my book. I can see variance of products at key line, it’s integrated with EPOS and I can see variances down to a single item.”
Concludes Mander: “I think it’s fair to say that procurement can be seen as a bit of a ‘dark art’, with traditional systems difficult to navigate. With Pelican, this is not the case. Our team are fully on board and engaged and we are seeing greater efficiencies and improved activity. My visibility of procurement is much stronger; the senior team in directorate get a clearer visibility on products, our supply chain and compliance.”
“As far as I’m concerned, our partnership with Pelican has been incredibly helpful. They’ve worked hand in hand with us to make this whole process a success, and with real heart I can confidently say we are in a much stronger position.”
To find out more about Pelican Procurement, visit: www.pelicanprocurement.co.uk